Popeyes buys its recipes in $43 million deal

The Atlanta-based company that franchises Popeyes fried chicken restaurants has purchased the recipes for many of the dishes served in those restaurants from Louisiana-based Diversified Foods and Seasonings for $43 million.

Diversified, based in Madisonville, is owned by the estate of the chain’s founder, Al Copeland Sr.

Popeyes also extended an agreement that covers the manufacturing and supply of proprietary spices and other Popeyes products that DFS provides the restaurant chain.

Popeyes Louisiana Kitchen Inc. announced the recipe purchase and extended supply agreement in a news release.

The statement said the recipe deal eliminates a $3.1 million annual royalty Popeyes was previously scheduled to pay Diversified until 2029.

Copeland founded what became the Popeyes chain in 1972 in a New Orleans suburb. He lost the company in a 1990s bankruptcy case after his ill-fated acquisition of the competing Church’s chicken chain in 1989.

However, he retained the exclusive contract to supply spices to Popeyes through Diversified Foods and Seasonings. Copeland family businesses also include casual dining restaurants in the Southeast.

Copeland died in 2008.

“With the cooperation of the Copeland family, this transaction now brings important intellectual property — Popeyes’ core recipes — under brand ownership for the first time in our company’s history,” CEO Cheryl Bachelder said.

She also noted that the supply terms beyond 2029 had been uncertain.

“Popeyes now owns its recipes in perpetuity for use worldwide and has clarity of supply and pricing terms through the balance of the supply agreement.

“We thank the Copeland family for reuniting these treasured recipes with the brand Al Copeland Sr. created,” Bachelder said.

“Reuniting the recipe with Popeyes strengthens the relationship between the Copeland family and Popeyes. The transaction will allow DFS to focus on what we do best for Popeyes, producing and innovating the highest quality products, including cooked foods, spices and breading systems,” said Al Copeland Jr., chairman of the board of Diversified and of Al Copeland Investments.

Popeyes Louisiana Kitchen Inc., the franchisor and operator of Popeyes restaurants, operates 2,248 restaurants in the United States, three territories and 27 foreign countries.

Al Copeland Sr. named the original Popeyes after a detective in the movie “The French Connection.” The spicy chicken in the suburb of Arabi was a hit, and Popeyes grew to become the nation’s third-largest chicken chain.

When the Church’s deal was closed in 1989, Copeland expected to sell high-yield “junk bonds” to repay the loans. But the collapse of the junk bond market and an economic slowdown put pressure on the company’s finances.

In New Orleans, Copeland was as well known for a flamboyant lifestyle — speedboat racing, a lavish annual Christmas light display at his home and multiple marriages — as for his businesses. He died of cancer at age 64.